McAuliffe Brings Back The Stamp Act (And Other Budget Oddities)

Virginia would force out-of-state internet retailers to collect sales taxes, and cut state funding for public universities and colleges by 5 percent to help balance the budget under a proposal outlined Friday by Gov. Terry McAuliffe.

Um… no.

One interesting proposal is a “tax amnesty” program designed to collect back taxes rather than go through the expensive method of collections. Cost savings to the Commonwealth? A one-time $59.2 million in revenue (if it works).

Other reactions include those voices claiming to represent Virginia state employees, from the Richmond Times-Dispatch, and one’s feelings on this alternate between outrage and laughter:

“State employee morale is in the toilet,” said R. Ronald Jordan, executive director of the Virginia Governmental Employees Association. “A bonus sends a signal that we’re not really committed to fixing salary disparities.”

Taxpayer morale is in the toilet. If a bonus is worse than a salary hike? Dispense with the bonus… though I doubt this comment even remotely reflects the sentiments of Virginia’s bureaucratic class in the slightest.

The governor did not include Medicaid expansion in his budget, per se, which is a departure after three years in office. But he did remove a clause blocking expansion, which Republican legislators previously wrote into the budget. McAuliffe replaced it with language allowing him to expand the program if it still exists come Oct. 1.

That will give time, McAuliffe argued, to see what President-elect Donald Trump and the Republican Congress do with the Affordable Care Act, which underpins expansion. They have promised to repeal at least some of the ACA, also known as Obamacare, but it remains to be seen how transformative those changes will be.

Of course, Medicaid expansion continues to go over like a ton of bricks, with both Howell and Norment definitively giving a firm “no” on the option.

Interesting as well to local government observers? GO Virginia, a project of the Virginia Chamber of Commerce and other regional business elites, gets a smidgen of a cut to its project of regionalization — a project met with some hostility from local governments looking to preserve their autonomy and from those warning against a “fourth layer” of government, while in turn viewed by many as the vehicle for turning such places as the Port of Virginia into a continental trade hub (yes, the stakes really are that high).

The administration identified more than $800 million in spending cuts, but exempted major agencies such as state police, corrections, juvenile justice, forensic science and the beleaguered behavioral health system, which would receive $31.7 million in additional funds to expand critical services for people with opioid addictions and mental illness.

While agency spending cuts could result in layoffs, McAuliffe did not propose any direct job cuts. Instead, he restored almost $220,000 that had been cut from the budget of the Library of Virginia in this year’s budget to “help avoid the planned layoffs” of 15 library staff.

McAuliffe also proposed a number of ways to increase revenues to help pay for spending, particularly the one-time bonuses. He proposed a tax amnesty program that he said would generate $59.2 million; a reversal of the planned rollback of accelerated sales tax collections by small and medium-sized businesses he said would produce about $49 million; and a requirement that online distribution centers register as dealers and collect sales taxes, for an added $21 million.

Needless to say, Bob Stuart over at the News Virginian was not entirely pleased with the budget, noting the intense scrutiny it gathered, specifically with regards to implied threats regarding Medicaid expansion:

“That is something we will have to grab our arms around,’’ said Landes. “Long term, the program is not sustainable.’’

Bell said McAuliffe is in an awkward position. He has one year left a governor.

“I don’t know how an outgoing governor can force many things through,’’ he said.

Ouch — but eminently true.

Truth be told, in years prior the Governor’s Budget doesn’t receive this sort of attention, especially given the absolute bruising McAuliffe received when he tried to cram Medicaid expansion down the throats of Richmond legislatures using Washington-style tactics.

Didn’t work. House and Senate Republicans seem rather keen on doing the people’s work this time around, blowing gentle air over the warm coals of a languishing Virginia economy hampered by the twin effects of McAuliffe’s mismanagement and federal sequestration. There are some positive infrastructure developments here and there, but do not expect novelties from a General Assembly waiting for the table to be set for the 2017 gubernatorial election.

…which is really what all of this budget posturing from the Democrats is about: agenda setting, not solutions.

When McAuliffe’s “big idea” consists in reviving an online version of the Stamp Act? That’s a Democratic party bankrupt on ideas.